Wonk Post: 9C Cuts and the Massachusetts Mid-Year Budget

Here is an overview of corporate welfare in Massachusetts relative to other State Spending, prior to Governor Patrick’s 9C cuts on December 4:



In the Governor’s mid-year budget is included $128 million in cuts and savings to MassHealth:

“…Since Massachusetts receives a 50 percent federal reimbursement for most MassHealth spending, the net savings for the state amount to roughly half of this total. The administration also expects to tap the Commonwealth Care Trust Fund (CCTF), since FY 2013 costs for the Commonwealth Care program are expected to be lower than originally projected (companion legislation filed with the 9C cuts would allow the administration to reduce the transfer from the General Fund to the CCTF, but no amount is specified).”

With the following results:

“Continued concentration of the hospital industry to create a larger referral base and to gain market power over the insurers.  But the safety net hospitals will be left out of those deals, for fear they will be a drag on earnings since such a large portion of their revenues is subject to state appropriations.  The ironic end result: A growing disparity in the level and quality of hospital care offered to the poor, precisely at the the time the poor are given greater access to health care services.”

Recommended by mark-bail, mrigney, dave-from-hvad.


6 Comments . Leave a comment below.
  1. Could this bar chart be said to reflect the priorities

    of the Weld through the Patrick administrations and the Legislature during the past 16 years?

    Encouraging business development has come first, followed by health care, education etc. (although after health care, spending for everything else has remained flat).

    Human services, local aid, and the environment have been last on the list.

    • I would be inclined to lump health care expenditures under “business development”, given the marked bias toward institutional providers (including insurance companies) hard-wired into the system.

      A good reference would be Trudy Lieberman’s analyses in the Columbia Journalism Review

      Another good source is Paul Levy’s blog “Not Running a Hospital”. Levy, the ex-CEO of Beth Israel Deaconess Hospital has, shall we say, frank and informed opinions about both the accountability and macroeconomics of healthcare.

      • I agree with what you're saying about the bias in health care spending,

        but I don’t think the state spends the money it does on health care as part of its priority of encouraging business development. Until we figure out a way to control health care costs, such as moving to a single payer system, it’s going to remain one of the biggest drains on state revenue.

        The administration doesn’t want to be paying as much as it is for health care — hence the passage of the “global payment” legislation earlier this year, and other similar initiatives in the past, none of which have been shown to make much of a dent in the problem.

        • The reference to "business development" is cultural

          …in the sense that there is cultural commonality between managerial elites; hence corporate executives, upper-level professionals (e.g. MDs, JDs,MBAs) and such tend to have the same frames of reference, and that reference trumps the interests of the lay public.

          The issue of cost cannot be addressed until there is an honest assessment of what drives costs, starting with the fact that the U.S. system is NOT a market system, but a conflation of guild socialism (through the medical and medical-education sectors) and managerial oligopoly (insurance companies, hospitals, etc.)

          The initiatives you cited don’t make a “dent in the problem” because they don’t address the problem. Similarly single payer won’t work in isolation because service delivery is trumped by the internal politics of status built into the system.

  2. Towns are doing the same thing.

    It has gotten beyond ridiculous and needs to stop. In the meantime, we are always wondering which of us is going to pay more taxes to subsidies those incentives and which important government programs will take the hit. We are in a downward spiral obviously, and if some fearless leader doesn’t stop the big business incentive/subsidy crisis, we will be falling smack to the ground pretty darn soon.

  3. Just a thought

    If I’m trying to balance a budget, I might avoid huge cuts in something that’s 50% reimbursed by Washington. Especially when it’s something important like health care for people who desperately need it. Talk about not getting bang for the buck. But perhaps this is Governor Patrick’s modest personal contribution to federal deficit reduction.

    A guy I used to work for in NYC said he represented the meter maids’ union during the 1970s municipal financing crisis. The city was proposing to cut parking enforcement jobs and he argued, successfully, that the proposal was counterproductive. Parking enforcement not only pays for itself, it brings in net revenue to the city. This is not quite as much a slam dunk, but it’s pretty close. You’re hurting MassHealth customers twice as much as you’re helping the state’s budget picture.

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Tue 28 Mar 11:52 AM